Producer Price Indexes

Producer Price Index News Release

Transmission of material in this release is embargoed until USDL 16-0946
8:30 a.m. (EDT), Friday, May 13, 2016
Technical information: (202) 691-7705 * ppi-info@bls.gov * www.bls.gov/ppi
Media contact: (202) 691-5902 * PressOffice@bls.gov
PRODUCER PRICE INDEXES - APRIL 2016
The Producer Price Index for final demand rose 0.2 percent in April, seasonally adjusted, the
U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.1 percent in
March and 0.2 percent in February. On an unadjusted basis, the final demand index was
unchanged for the 12 months ended in April. (See table A.)
In April, prices for final demand services edged up 0.1 percent, and the index for final demand
goods advanced 0.2 percent.
The index for final demand less foods, energy, and trade services moved up 0.3 percent in April
following no change in March. For the 12 months ended in April, prices for final demand less
foods, energy, and trade services rose 0.9 percent.
Final Demand
Final demand services: The index for final demand services edged up 0.1 percent in April following
a 0.2-percent decline in March. The increase can be traced to prices for final demand services less
trade, transportation, and warehousing, which climbed 0.3 percent. In contrast, the indexes for final
demand transportation and warehousing services and for final demand trade services decreased 0.4
percent and 0.1 percent, respectively.
Product detail: A major factor in the April advance in the index for final demand services was prices
for portfolio management, which climbed 4.5 percent. The indexes for fuels and lubricants retailing,
residential real estate loans (partial), chemicals and allied products wholesaling, and truck
transportation of freight also increased. Conversely, prices for airline passenger services fell 1.7
percent. The indexes for health, beauty, and optical goods retailing; machinery and equipment
wholesaling; and services related to securities brokerage and dealing also moved lower. (See table 4.)
Final demand goods: The index for final demand goods advanced 0.2 percent in April, the same as
in March. Most of the April rise can be traced to prices for final demand goods less foods and energy,
which climbed 0.3 percent. The index for final demand energy moved up 0.2 percent. In contrast,
prices for final demand foods declined 0.3 percent.
Product detail: A contributor to the April increase in prices for final demand goods was the index for
carbon steel scrap, which jumped 22.1 percent. Prices for gasoline, electric power, pharmaceutical
preparations, beef and veal, and prepared poultry also advanced. Conversely, prices for chicken eggs
dropped 33.9 percent. The indexes for home heating oil and jet fuel also fell.

Footnotes(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for December 2015 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Commodity Type
Within intermediate demand in April, prices for processed goods advanced 0.3 percent, the index for
unprocessed goods rose 2.6 percent, and prices for services moved up 0.1 percent. (See tables B and
C.)
Processed goods for intermediate demand: The index for processed goods for intermediate
demand increased 0.3 percent in April following nine straight declines. Over three-quarters of the
advance can be traced to prices for processed materials less foods and energy, which rose 0.3 percent.
The index for processed energy goods increased 0.5 percent. In contrast, prices for processed foods
and feeds fell 0.3 percent. For the 12 months ended in April, the index for processed goods for
intermediate demand declined 4.6 percent.
Product detail: A major factor in the April advance in prices for processed goods for intermediate
demand was the index for primary basic organic chemicals, which rose 2.9 percent. Prices for
gasoline, electric power, steel mill products, biological products, and meat and bone meal also moved
higher. Conversely, the index for processed eggs dropped 15.5 percent. Prices for jet fuel and for
paving mixtures and blocks also decreased. (See table 5.)
Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate
demand advanced 2.6 percent in April after increasing 2.5 percent in March. Most of the rise in April
is attributable to prices for unprocessed energy materials, which jumped 9.0 percent. The index for
unprocessed nonfood materials less energy moved up 3.5 percent. In contrast, prices for unprocessed
foodstuffs and feedstuffs fell 1.9 percent. For the 12 months ended in April, the index for
unprocessed goods for intermediate demand dropped 12.3 percent.
Product detail: Eighty percent of the April advance in prices for unprocessed goods for intermediate
demand can be attributed to the index for crude petroleum, which rose 17.6 percent. Prices for carbon
steel scrap, natural gas, slaughter hogs, copper ores, and oilseeds also moved higher. Conversely, the
index for slaughter cattle declined 3.5 percent. Prices for corn and coal also fell.

Footnotes(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for December 2015 have been revised to reflect the availability of late reports and corrections by respondents.

Services for intermediate demand: The index for services for intermediate demand inched up 0.1
percent in April following a 0.3-percent decline in March. Leading the advance, prices for services
less trade, transportation, and warehousing for intermediate demand increased 0.1 percent. In
addition, the index for trade services for intermediate demand rose 0.4 percent. In contrast, prices for
transportation and warehousing services for intermediate demand fell 0.5 percent. For the 12 months
ended in April, the index for services for intermediate demand moved up 0.9 percent.
Product detail: A major contributor to the rise in prices for services for intermediate demand was the
index for business loans (partial), which climbed 0.9 percent. The indexes for portfolio management,
chemicals and allied products wholesaling, passenger car rental, and truck transportation of freight
also moved higher. Conversely, prices for U.S. postal services fell 3.5 percent. The indexes for
services related to securities brokerage and dealing; legal services; and hardware, building materials,
and supplies retailing also decreased.

Footnotes(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for December 2015 have been revised to reflect the availability of late reports and corrections by respondents.

Intermediate Demand by Production Flow
Stage 4 intermediate demand: The index for stage 4 intermediate demand advanced 0.3 percent in
April following two straight declines. In April, prices for total services inputs to stage 4 intermediate
demand climbed 0.4 percent, and the index for total goods inputs rose 0.2 percent. (See table D.)
Increases in the indexes for portfolio management, electric power, chemicals and allied products
wholesaling, biological products, gasoline, and ready-mix concrete outweighed falling prices for
services related to securities brokerage and dealing, U.S. postal services, and paving mixtures and
blocks. (See table 6.) For the 12 months ended in April, the index for stage 4 intermediate demand
moved down 0.9 percent.
Stage 3 intermediate demand: The index for stage 3 intermediate demand edged down 0.1 percent
in April following no change in March. In April, prices for total goods inputs to stage 3 intermediate
demand decreased 0.3 percent, while the index for total services inputs was unchanged. Lower prices
for jet fuel, slaughter cattle, U.S. postal services, ungraded chicken eggs, and services related to
securities brokerage and dealing outweighed increases in the indexes for gasoline, slaughter hogs,
primary basic organic chemicals, and chemicals and allied products wholesaling. For the 12 months
ended in April, the index for stage 3 intermediate demand fell 4.1 percent.
Stage 2 intermediate demand: The index for stage 2 intermediate demand climbed 0.9 percent in
April after rising 0.5 percent in March. In April, prices for total goods inputs to stage 2 intermediate
demand jumped 2.5 percent. In contrast, the index for total services inputs fell 0.2 percent. Higher
prices for crude petroleum, natural gas, portfolio management, steel mill products, thermoplastic
resins and materials, and carbon steel scrap outweighed decreases in the indexes for services related
to securities brokerage and dealing, U.S. postal services, and non-corrugated paperboard. For the 12
months ended in April, the index for stage 2 intermediate demand moved down 3.0 percent.
Stage 1 intermediate demand: The index for stage 1 intermediate demand rose 0.7 percent in April
following no change in March. In April, prices for total goods inputs to stage 1 intermediate demand
advanced 1.1 percent, and the index for total services inputs moved up 0.3 percent. Increases in the
indexes for carbon steel scrap, primary basic organic chemicals, crude petroleum, electric power,
chemicals and allied products wholesaling, and portfolio management outweighed lower prices for
services related to securities brokerage and dealing, diesel fuel, and airline passenger services. For
the 12 months ended in April, the index for stage 1 intermediate demand dropped 4.4 percent.

Footnotes(1) Some of the figures shown above and elsewhere in this release may differ from those previously reported because data for December 2015 have been revised to reflect the availability of late reports and corrections by respondents.

_____________
The Producer Price Index for May 2016 is scheduled to be released on Wednesday, June 15,
2016 at 8:30 a.m. (EDT).

Technical Note
Brief Explanation of Producer Price Indexes
The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a family of
indexes that measures the average change over time in prices received (price changes) by
producers for domestically produced goods, services, and construction. PPIs measure
price change from the perspective of the seller. This contrasts with other measures,
such as the Consumer Price Index (CPI). CPIs measure price change from the purchaser's
perspective.
More than 10,000 PPIs for individual products and groups of products are released each
month. PPIs are available for the products of virtually every industry in the mining and
manufacturing sectors. Over time, new PPIs have been introduced for products of
industries in the services and construction sectors of the U.S. economy. As of January
2013, the PPI covered about 70 percent of services as measured by 2007 Census revenue,
and 34 percent of construction.
More than 100,000 price quotations per month are organized into three sets of PPIs:
(1) Final demand-Intermediate demand (FD-ID) indexes, (2) commodity indexes, and (3)
indexes for the net output of industries and their products. The FD-ID structure
organizes products by class of buyer and degree of fabrication as well as by stage of
production. The commodity structure organizes products by similarity of end use or
product type. The entire output of various industries is sampled to derive price indexes
for the net output of industries and their products.
Final Demand-Intermediate Demand Indexes
The PPI FD-ID structure measures price change for goods, services, and construction
sold to final demand and to intermediate demand. The FD-ID system replaced the PPI stage-
of-processing (SOP) system as PPI's primary aggregation model with the release of data
for January 2014. The FD-ID model expands coverage beyond that of the SOP system through
the addition of services, construction, exports, and government purchases.
Compared with finished goods under the SOP system, the PPI for final demand goods
includes nearly a 50 percent expansion of coverage. This increase can be traced to the
addition of government purchases and exports. For overall final demand, expansion to
include final demand services represents an even larger increase in coverage. In December
2012, final demand goods were about 34.5 percent of overall final demand, final demand
services were roughly 63.5 percent, and final demand construction was about 2.0 percent
of final demand. Within intermediate demand, coverage of services for intermediate demand
resulted in about a 45 percent increase in coverage of the intermediate demand portion of
the economy.
FD-ID indexes are constructed from commodity-based producer output price indexes.
Commodities are allocated to aggregate indexes primarily based on the type of buyer. The
main source of data used to determine the type of buyer is the "Use of commodities by
industries, before redefinition," table from the Benchmark Input-Output Accounts of the
U.S. In many cases, the same commodity is purchased by different types of buyers. As a
result, commodities are often included in several FD-ID indexes. For example, regular
gasoline is purchased for personal consumption, export, government use, and business use.
The PPI program publishes only one commodity index for regular gasoline (wpu057104),
reflecting sales to all types of buyers, and this index is used in all aggregations
regardless of whether the gasoline is sold for personal consumption, as an export, to
government, or to businesses. Proportions based on BEA "Use of Commodities" data are
used to allocate the correct portion of the total weight of gasoline to each use
category. In cases when buyer type is an important price determining characteristic,
indexes are created based on specific buyer type. For example, within the PPI category
for loan services, separate indexes for consumer loans and business loans were
constructed. For more information relating to the FD-ID structure, see "A new,
experimental system of indexes from the PPI program" in the February 2011 Monthly Labor
Review.
Final Demand: The final demand portion of the FD-ID structure measures price change for
commodities sold for personal consumption, capital investment, government, and export.
The system is composed of six main price indexes: final demand goods; final demand trade
services; final demand transportation and warehousing services; final demand services
less trade, transportation, and warehousing; final demand construction; and overall final
demand.
The final demand goods index measures price change for both unprocessed and processed
goods sold to final demand. Fresh fruits sold to consumers and computers sold for
capital investment are examples of transactions included in the final demand goods price
index. The final demand trade services index measures price change for the retailing and
wholesaling of merchandise sold to final demand, generally without transformation. (Trade
indexes measure changes in margins received by wholesalers and retailers.) The final
demand transportation and warehousing services index tracks price change for
transportation of passengers, as well as, transportation of cargo sold to final demand,
and also includes prices for warehousing and storage of goods sold to final demand. The
final demand services less trade, transportation, and warehousing index measures price
change for all services other than trade and transportation sold to final demand.
Publishing, banking, lodging, and health care are examples of these services. The final
demand construction index tracks price change for new construction, as well as
maintenance and repair construction sold to final demand. Construction of office
buildings is an example of a commodity that would be included in the final demand
construction index. Lastly, the overall final demand index tracks price change for all
types of commodities sold to final demand by combining the five final demand component
indexes described above.
Intermediate Demand: The intermediate demand portion of the FD-ID system tracks price
change for goods, services, and construction products sold to businesses as inputs to
production, excluding capital investment. The system includes two parallel treatments of
intermediate demand. The first treatment organizes intermediate demand commodities by
type. The second organizes intermediate demand commodities into production stages, with
the explicit goal of developing a forward-flow model of production and price change.
The intermediate demand by commodity type portion of the system organizes commodities
by similarity of product. The system is composed of six main price indexes: unprocessed
goods for intermediate demand; processed goods for intermediate demand; intermediate
demand trade services; intermediate demand transportation and warehousing services;
intermediate demand services less trade, transportation, and warehousing; and
intermediate demand construction.
The unprocessed goods for intermediate demand price index measures price change for
goods sold to businesses as inputs to production that have undergone no fabrication.
Crude petroleum sold to refineries is an example of an unprocessed good sold to
intermediate demand. The processed goods for intermediate demand index tracks price
change for fabricated goods sold as business inputs. Examples include car parts sold to
car manufacturers and gasoline sold to trucking companies. The index for trade services
for intermediate demand measures price change for the services of retailing and
wholesaling goods purchased by businesses as inputs to production. The intermediate
demand transportation and warehousing services index measures price change for business
travel, as well as, transportation and warehousing of cargo sold to intermediate demand.
The intermediate demand services less trade, transportation, and warehousing index
measures price change for services other than trade, transportation, and warehousing sold
as inputs to production. Legal and accounting services purchased by businesses are
examples of intermediate demand services excluding trade, transportation, and
warehousing. Finally, the construction for intermediate demand index measures price
change for construction purchased by firms as inputs to production. The index for
construction for intermediate demand tracks price change for maintenance and repair
construction purchased by firms.
The production flow treatment of intermediate demand is a stage-based system of price
indexes. These indexes can be used to study price transmission across stages of
production and final demand. This system is constructed in a manner that maximizes
forward flow of production between stages, while minimizing back-flow of production. The
production flow treatment contains four main indexes: intermediate demand stage 1,
intermediate demand stage 2, intermediate demand stage 3, and intermediate demand stage
4.
Indexes for the four stages were developed by first assigning each industry in the
economy to one of four stages of production, where industries assigned to the fourth
stage primarily produce output consumed as final demand, industries in the third stage
primarily produce output consumed by stage 4 industries, industries assigned to the
second stage primarily produce output consumed by stage 3 industries, and industries
assigned to the first stage produce output primarily consumed by stage 2 industries. The
four indexes then track prices for the net inputs consumed by industries in each of the
four stages of production. The stage 4 intermediate demand index, for example, tracks
price change for inputs consumed, but not produced, by industries included in the fourth
stage of production. Hence, the index tracks price change in inputs to industries that
primarily produce final demand commodities (stage 4 producers primarily produce
commodities sold to final demand).
Examples of heavily weighted goods-producing industries in stage 4 include the
manufacture of light trucks and utility vehicles, automobiles, and pharmaceuticals.
Retail trade, food service and drinking places, and hospitals are examples of heavily
weighted service industries included in stage 4. Stage 4 also includes all new
construction industries. Examples of goods consumed by stage 4 industries include motor
vehicle parts, commercial electric power, plastic construction products, biological
products, and beef and veal. Engineering services, machinery and equipment wholesaling,
long distance motor carrying, and legal services constitute examples of services consumed
by stage 4 industries.
Examples of highly weighted goods-producing industries included in stage 3 are motor
vehicle parts manufacturing, animal (except poultry) slaughtering and processing, and
semiconductor manufacturing. Services industries classified in stage 3 include wholesale
trade; insurance carriers; architecture, engineering, and related services; and hotels
and motels. Examples of goods consumed by stage 3 industries include slaughter steers
and heifers, industrial electric power, and hot rolled steel bars, plates, and structural
shapes. Services commonly consumed by stage 3 industries include commissions from sales
of property and casualty insurance, business loans, temporary help services, and
administrative and general management consulting services.
Petroleum refineries; electricity generation, transmission, and distribution; natural
gas distribution; cattle ranching and farming; and plastic materials and resin
manufacturing are among the goods-based industries assigned to stage 2. Services
industries that are heavily weighted in stage 2 include management of companies and
enterprises; non-depository credit intermediation; insurance agencies and brokerages; and
services to buildings and dwellings. Goods commonly purchased by stage 2 industries
include crude oil, natural gas, formula feeds, and primary basic organic chemicals.
Services that are heavily weighted in the intermediate demand stage 2 index are legal
services, business loans, and cellular phone and other wireless telecommunication.
Goods producing industries in stage 1 include oil and gas extraction, paper mills, and
grain farming. Real estate, legal services, and advertising services are examples of
highly weighted services industries included in stage 1. Examples of goods consumed by
stage 1 industries are commercial and industrial electric power and gasoline. Services
commonly consumed by stage 1 industries include solid waste collection, chemicals and
allied products wholesaling, and guestroom or unit rental. It should be noted that all
inputs purchased by stage 1 industries are by definition produced either within stage 1
or by latter stages of processing, leaving stage 1 less useful for price transmission
analysis. For additional information on industry stage assignments, see
http://www.bls.gov/ppi/industryflowstage.htm.
Comparing the PPI with CPI
Although some data users utilize the PPI as a potential indicator of the Consumer
Price Index (CPI), there are many reasons why the PPI and the CPI may diverge. The scope
of the personal consumption portion of the PPI includes all marketable output sold by
domestic producers for households. The scope of the CPI includes goods and services
provided by business or government, where explicit user charges are paid by consumers.
For example, the most heavily weighted item in the CPI, owners' equivalent rent, is
excluded from the PPI. The scope of the CPI includes imports. The PPI excludes imports.
The CPI only includes components of personal consumption directly paid for by the
consumers, while the PPI includes components of personal consumption that may not be paid
for by consumers. For example, the PPI includes medical services paid for by third
parties. In contrast to CPI, PPI does not completely cover services. PPIs exclude taxes,
since they do not represent producer revenue. Conversely, sales and other taxes paid by
consumers are part of household expenditure and are included in the CPI. Additional
technical differences between PPI and CPI also exist. For more information see "Comparing
new final demand producer price indexes with other Government price indexes," Monthly
Labor Review, January 2014, at http://www.bls.gov/opub/mlr/.
Commodity Indexes
The commodity classification of the PPI organizes goods, services, and construction by
similarity of product or end use, disregarding industry of origin. With the release of
data for July 2009, PPI expanded its commodity structure to include indexes for services
and construction products. Prior to this date, the PPI commodity structure only included
products from goods producing sectors. Table 9 of the PPI Detailed Report includes data
for commodity indexes, organized in a hierarchal structure, including major groupings,
subgroups, product classes, sub-product classes, and individual items.
Industry Net-Output Price Indexes
PPIs for the net output of industries and their products are grouped according to the
North American Industry Classification System (NAICS). Prior to the release of January
2004, industry-based PPIs were published according to the Standard Industrial
Classification (SIC) system. Industry price indexes are compatible with other economic
time series organized by industry, such as data on employment, wages, and productivity.
Table 11 of the PPI Detailed Report includes data for NAICS industries and industry
groups (3-, 4-, 5-, and 6-digit codes), Census product classes (7- and 8-digit codes),
products (9-digit codes), more detailed sub-products (11-digit codes), and, for some
industries, indexes for other sources of revenue.
Indexes may represent one of three kinds of product categories. Every industry has
primary product indexes that show changes in prices received by establishments classified
in the industry for products made primarily, but not necessarily exclusively, by that
industry. The industry classification of an establishment is determined by which products
make up a plurality of its total shipment value. In addition, most industries have
secondary product indexes that show changes in prices received by establishments for
products chiefly made in some other industry. Some industries have miscellaneous receipts
indexes that track price changes for other sources of revenue received by establishments
within the industry that are not derived from sales of their products; for example,
resales of purchased materials, or revenues from parking lots owned by a manufacturing
plant.
Data Collection
PPIs are constructed using selling prices reported by establishments of all sizes,
selected by probability sampling, with the probability of selection
proportionate to size. Individual items and transaction terms also are chosen by
probability proportionate to size. BLS strongly encourages cooperating companies to
supply actual transaction prices at the time of shipment to minimize the use of list
prices. Prices submitted by survey respondents are effective on the Tuesday of the week
containing the 13th day of the month. The survey is conducted via Internet, mail, and
fax.
Price data are provided on a voluntary and confidential basis; only sworn BLS
employees are allowed access to individual company price reports. BLS publishes price
indexes instead of actual prices. All PPIs are subject to revision 4 months after
original publication to reflect the availability of late reports and corrections by
respondents.
BLS periodically updates the PPI sample of survey respondents to better reflect
current conditions when the structure, membership, technology, or product mix of an
industry shifts significantly and to spread reporting burden among smaller firms.
Results of these resampling efforts are incorporated into the PPI with the release of
data for January and July.
As part of an ongoing effort to expand coverage to sectors of the economy other than
mining and manufacturing, an increasing number of service and construction sector
industries have been introduced into the PPI. The following list of industries
introduced since the mid-1990s includes the month and year in which an article describing
the industry's content appeared in the PPI Detailed Report.
PPI
Detailed
Report
Title Code Issue
SIC
Wireless telecommunications...................................4812 July 1999
Telephone communications, except radio telephone..............4813 July 1995
Television broadcasting.......................................4833 July 2002
Grocery stores................................................5411 July 2000
Meat and fish (seafood) markets...............................5421 July 2000
Fruit and vegetable markets...................................5431 July 2000
Candy, nut, and confectionery stores..........................5441 July 2000
Retail bakeries...............................................5461 July 2000
Miscellaneous food stores.....................................5499 July 2000
New car dealers...............................................5511 July 2000
Gasoline service stations.....................................5541 January 2002
Boat dealers..................................................5551 January 2002
Recreational vehicle dealers..................................5561 January 2002
Miscellaneous retail..........................................59 January 2001
Security brokers, dealers, and investment bankers.............6211 January 2001
Investment advice.............................................6282 January 2003
Life insurance carriers.......................................6311 January 1999
Property and casualty insurance...............................6331 July 1998
Insurance agencies and brokerages.............................6412 January 2003
Operators and lessors of nonresidential buildings.............6512 January 1996
Real estate agents and managers...............................6531 January 1996
Prepackaged software..........................................7372 January 1998
Data processing services......................................7374 January 2002
Home health care services.....................................8082 January 1997
Legal services................................................8111 January 1997
Engineering design, analysis, and consulting services.........8711 January 1997
Architectural design, analysis, and consulting services.......8712 January 1997
Premiums for property and casualty insurance..................9331 July 1998
NAICS
New industrial building construction..........................236211 January 2008
New warehouse building construction...........................236221 July 2005
New school construction.......................................236222 July 2006
New office construction.......................................236223 January 2007
New health care building construction.........................236224 January 2013
Concrete contractors, nonresidential building work............23811X July 2008
Roofing contractors, nonresidential building work.............23816X July 2008
Electrical contractors, nonresidential building work..........23821X July 2008
Plumbing / HVAC contractors, nonresidential building work.....23822X July 2008
Merchant wholesalers, durable goods...........................423 July 2005
Merchant wholesalers, nondurable goods........................424 July 2005
Wholesale trade agents and brokers............................425120 July 2005
Furniture and home furnishings stores.........................442 January 2004
Electronics and appliance stores..............................443 January 2004
Building material and garden equipment and supplies dealers...444 January 2004
Clothing and clothing accessories stores......................448 January 2004
Sporting goods, hobby, book, and music stores.................451 January 2004
General merchandise stores....................................452 January 2004
Miscellaneous store retailers.................................453 January 2004
Internet service providers....................................518111 July 2005
Internet publishing and web search portals....................519130 January 2010
Commercial banking............................................522110 January 2005
Savings institutions..........................................522120 January 2005
Direct health and medical insurance carriers..................524114 July 2004
Construction, mining, and forestry machinery and equipment
rental and leasing............................................532412 January 2005
Management consulting services................................541610 January 2007
Security guards and patrol services...........................561612 July 2005
Computer training.............................................611420 July 2007
Offices of dentists...........................................621210 January 2011
Blood and organ banks.........................................621991 January 2007
Amusement and theme parks.....................................713110 July 2006
Golf courses and country clubs................................713910 July 2006
Fitness and recreational sports centers.......................713940 July 2005
Commercial machinery repair and maintenance...................811310 July 2007
Weights
Weights for most commodity groupings of the PPI, as well as, weights for commodity-
based aggregate indexes calculated from commodity groupings, such as FD-ID indexes,
currently reflect 2007 values of shipments as reported in the Census of Manufactures and
other sources. From January 2007 to December 2011, PPI weights were derived from 2002
shipment values. Industry indexes now are calculated under the 2012 NAICS structure
utilizing 2007 value of shipment weights and 2002 net output ratios. The periodic update
of the value weights used to calculate the PPI is done to more accurately reflect changes
in production and marketing patterns in the economy.
Net output values of shipments are used as weights for industry indexes. Net output
values refer to the value of shipments from establishments within the industry to buyers
outside the industry. However, weights for commodity indexes are based on gross shipment
values, including values of shipments between establishments within the same industry. As
a result, broad commodity grouping indexes, such as the PPI for All Commodities (which is
composed of major commodity groupings 01 through 15), are affected by the multiple
counting of price change at successive stages of processing, which can lead to
exaggerated or misleading signals about inflation. The intermediate demand by commodity
type FD-ID indexes partially correct for this defect, but industry indexes, final demand
FD-ID indexes, and intermediate demand by production flow FD-ID indexes consistently
correct for this at all levels of aggregation. Therefore, industry and FD-ID indexes are
more appropriate than broad commodity groupings for analysis of general price trends.
Price Index Reference Base
Effective with publication of January 1988 data, many important PPI series (including
most commodity groups and individual items) were placed on a new reference base, 1982 =
100. From 1971 through 1987, the standard reference base for most PPI series was 1967 =
100. Except for rounding differences, the shift to the new reference base did not alter
any previously published percent changes for affected PPI series. (See "Calculating Index
Changes," below.) The 1982 reference base is not used for commodity indexes with a base
later than December 1981 or for industry net output indexes and their products. The FD-
ID indexes typically have a reference base of November 2009 = 100.
For further information on the underlying concepts and methodology of the Producer
Price Index, see chapter 14, "Producer Prices," in the BLS Handbook of Methods. This
chapter can be downloaded from the BLS Web site at www.bls.gov/opub/hom/homch14.htm.
Calculating Index Changes
Each PPI measures price changes from a reference period that equals 100.0. An
increase of 5.5 percent from the reference period in the Final Demand Goods Price Index,
for example, is shown as 105.5. This change also can be expressed in dollars, as
follows: prices received by domestic producers of a sample of final demand goods have
risen from $100 in November 2009 to $105.50. Likewise, a current index of 90.0 would
indicate that prices received by producers of final demand goods are 10 percent lower
than they were in November 2009.
Movements of price indexes from one month to another are usually expressed as percent
changes, rather than as changes in index points. Index point changes are affected by the
level of the index in relation to its base period, whereas percent changes are not. The
following example shows the computation of index point and percent changes.
Index point change
Final Demand Goods Price Index 107.5
Less previous index 104.0
Equals index point change 3.5
Index percent change
Index point change 3.5
Divided by the previous index 104.0
Equals 0.034
Result multiplied by 100 0.034 x 100
Equals percent change 3.4
Seasonally Adjusted and Unadjusted Data
Because price data are used for different purposes by different groups, BLS publishes
seasonally adjusted and unadjusted changes each month. Seasonally adjusted data are
preferred for analyzing general price trends in the economy because these data eliminate
the effect of changes that normally occur at about the same time, and in about the same
magnitude, every year-such as price movements resulting from normal weather patterns,
regular production and marketing cycles, model changeovers, seasonal discounts, and
holidays. For these reasons, seasonally adjusted data more clearly reveal underlying
trends. Unadjusted data are of primary interest to users who need information that can
be related to actual dollar values of transactions. Individuals requiring this
information include marketing specialists, purchasing agents, budget and cost analysts,
contract specialists, and commodity traders. It is the unadjusted data that are
generally cited when escalating long-term contracts such as purchasing agreements or real
estate leases. For more information, see Escalation Guide for Contracting Parties, on
the Web at www.bls.gov/ppi/ppiescalation.htm.
In 1998, the PPI implemented the X-12-ARIMA Seasonal Adjustment Method; prior to that
year, PPI employed the X-11 method. Each year, the seasonal status of most commodity
indexes is reevaluated to reflect more recent price behavior. Industry net output indexes
are not seasonally adjusted. For time series that exhibit seasonal pricing patterns, new
seasonal factors are estimated and applied to the unadjusted data from the prior 5 years.
Updated seasonally adjusted indexes replace the most recent 5 years of seasonal data.
Seasonal factors may be applied to series using either a direct or an aggregative
method. Generally, commodity indexes are seasonally adjusted using direct seasonal
adjustment, which produces a more complete elimination of seasonal movements than does
the aggregative method. However, the direct seasonal adjustment process may not yield
figures that possess additive consistency. Thus, a seasonally adjusted index for a broad
category that is directly adjusted may not be logically consistent with all seasonally
adjusted indexes for its components. Seasonal movements for FD-ID indexes are derived
indirectly through an aggregative method that combines movements of a wide variety of
subproduct class (six-digit) series.
Seasonally adjusted indexes can become problematic when previously stable and
predictable price patterns abruptly change. If the new pattern persists, the seasonal
adjustment method will eventually reflect it; if the pattern keeps shifting, however,
seasonally adjusted data will become chronically troublesome. This problem occurs
relatively infrequently for farm and food-related products, but has more often affected
manufactured products such as automobiles and steel.
Since January 1988, the PPI has used Intervention Analysis Seasonal Adjustment methods
to enhance the calculation of seasonal factors. With this technique, outlier values that
may distort the seasonal pattern are removed from the data prior to applying the standard
seasonal factor estimation procedure. For example, a possible economic cause for large
price movements for petroleum-based products might have been the Persian Gulf War. In
this case, intervention techniques allowed for better estimates of seasonally adjusted
data. On the whole, very few series have required intervention. Out of almost 300
seasonally adjusted series, only 31 were subject to intervention in 2013.
For more information relating to seasonal adjustment methods, see "Summary of Changes
to the PPI's Seasonal Adjustment Methodology" in the January 1995 issue of Producer Price
Indexes, and "PPI and CPI Seasonal Adjustment: an Update" in the July 2010 Monthly Labor
Review.
Producer Price Index Data on the Internet
In 1995, the BLS began posting PPI series, news releases, and technical information to
both a World Wide Web (WWW) site and a file transfer protocol (FTP) site. During the
years following the introduction of PPI Internet services, use of these sites eclipsed
more traditional methods of data dissemination, such as subscriptions to the PPI Detailed
Report. There were more than 5 million instances of PPI data and tables being downloaded
from the Internet during the 12 months ended December 31, 2012.
Retrieving PPI data from the PPI Web site
PPI data can be obtained from the WWW address (www.bls.gov/ppi). On this page, under
the tab labeled "Featured PPI databases" links provide the following methods of data
retrieval:
Top Picks is a form-based application for both Industry Data and Commodity Data that
allows the user to quickly obtain PPI time series data by selecting the high-level
aggregate and other commonly requested time series, including the All Commodities Index
and the FD-ID indexes (for example, Final Demand). Within each list, any one-or all-of
the time series shown can be selected. A user can modify the date range and output
options after executing the query, using the reformat button above the data output table.
One-Screen Data Search and Multi-Screen Data Search are form-based query applications
for both Industry Data and Commodity Data designed for users unfamiliar with the PPI
coding structure. These applications guide a user through the PPI classification by
listing index titles and do not require knowledge of commodity or industry codes. Data
retrieved are based on a query formulated by selecting data characteristics from lists
provided. Two options are available to create customized tables, depending on a user's
browser capability. The one-screen option is a JavaScript application that uses a single
screen to guide a user through the available time series data. The second option is a
multiple-screen, non-Java-based application. Both methods allow a user to browse the PPI
coding structure and select multiple series. Users can modify the date range and output
options after executing the query using the reformat button above the data output table.
Series Report is a form-based application that allows users to input multiple,
formatted PPI time series identifiers (commodity or industry codes) as inputs in
extracting data according to a specified set of date ranges and output options. This
application provides the most efficient path for users who are familiar with the format
of PPI time series identifiers. There are five alphabetic prefixes used to create unique
PPI time series identifiers: WP, WD, PC, PD, and ND. Each provides the user access to a
different PPI database. Adding either a "u" (not seasonally adjusted) or an "s"
(seasonally adjusted) to the end of these prefixes further specifies the type of data
needed. Examples are provided below.
For commodity and FD-ID indexes, series identifiers combine a "wpu" prefix (not
seasonally adjusted) or a "wps" prefix (seasonally adjusted) with a commodity code.
Commodity code Provides data for:
wps141101 Passenger cars, seasonally adjusted
wpu141101 Passenger cars, not seasonally adjusted
wpufd4 Final demand, not seasonally adjusted
wpsid63 Services for intermediate demand, seasonally adjusted
For discontinued commodity indexes, series identifiers combine a "wdu" prefix (not
seasonally adjusted) or a "wds" prefix (seasonally adjusted) with a commodity code.
Commodity code Provides data for:
wds019 Other farm products, seasonally adjusted
wdu0635 Preparations, ethical (prescription), not seasonally adjusted
wdusi138011 Stainless steel mill products, not seasonally adjusted
Current price indexes grouped by industry according to NAICS have series identifiers
that begin with the prefix "pcu." After the prefix, there are 12 digits (the 6-digit
industry code is listed twice) followed by up to 7 alphanumeric characters identifying
product detail. Dashes are used as placeholders for higher-level industry group codes.
Industry-product code,
current NAICS series Provides data for:
pcu325---325--- Chemical manufacturing
pcu336110336110 Automobile and light duty motor vehicle manufacturing
pcu621111621111411 Offices of physicians, one- and two-physician practices and
single-
specialty group practices, general/family practice
Discontinued industry-product codes based on SIC combine a "pdu" prefix and "#"
between the fourth and fifth characters of the product code. Series identifiers for the
discontinued dataset use underscores as placeholders to complete a reference to an SIC
industry group code of fewer than four digits. (All PPI industry-based indexes organized
by SIC were discontinued with the introduction of NAICS in 2004.)
Industry-product code,
discontinued SIC series Provides data for:
pdu28_ _# Chemicals and allied products
pdu331_# Blast furnaces, steel works, and rolling and finishing mills
pdu3711#111 Passenger cars
Price indexes for discontinued series grouped by industry according to NAICS have
identifiers that begin with the prefix "ndu." After the prefix, there are 12 numeric
digits (the 6-digit industry code is listed twice), and up to 7 additional alphanumeric
characters that identify product detail. Dashes are used as placeholders for higher-
level group codes.
Industry-product code,
discontinued NAICS series Provides data for
ndu212231212231 Lead and zinc ore mining
ndu2122312122312 Lead, zinc concentrates
ndu212231212231214 Lead concentrates
Text Files are best suited for users requiring access to either a large volume of time
series data or other PPI-related documentation, such as seasonal factor tables and
relative importance tables. The text files can be accessed at http://download.bls.gov/ or
directly from links on the "PPI Databases" page or the PPI homepage. Data and
documentation available for download include the following:
Directory:
Industry Data /pub/time.series/pc
Industry Data - Discontinued
(NAICS basis) /pub/time.series/nd
(SIC basis) /pub/time.series/pd
Commodity Data (incl. FD-ID) /pub/time.series/wp
Commodity Data - Discontinued /pub/time.series/wd
Special requests /pub/special.requests/ppi
Additional information
The PPI homepage (www.bls.gov/ppi) contains additional information regarding PPI data
and methodology. The top section of the homepage provides PPI news releases, both
current and archived, as well as general PPI information. The "PPI Tables" section found
beneath the statistics section provides relative importance and seasonal factor tables.
The remaining sections offer special notices and publications pertaining to PPI
methodology and applications.
For questions or comments regarding PPI data classification, methodology, or data
availability on the Internet, call or e-mail the Section of Index Analysis and Public
Information at (202) 691-7705 or ppi-info@bls.gov.

Footnotes(1) Further information about the Final Demand-Intermediate Demand Aggregation system is available online at http://www.bls.gov/ppi/fdidaggregation.htm.(2) Comprehensive relative importance figures are initially computed after the publication of December indexes and are recalculated after final December indexes are available. Individual items and subtotals may not add exactly to totals because of rounding differences.(3) The indexes for December 2015 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.(4) PPI defines Total finished as including only the personal consumption and private capital investment portions of final demand.(5) Trade indexes measure changes in margins received by wholesalers and retailers.(6) The PPI definition of foods does not include food and beverages for immediate consumption. PPI defines food and beverages for immediate consumption as the service of preparing meals, snacks, and beverages to customer order for immediate on-premises and off-premises consumption.(7) Distributive services include transportation, warehousing, and trade of goods.

Footnotes(1) Further information about the Final Demand-Intermediate Demand Aggregation system is available online at http://www.bls.gov/ppi/fdidaggregation.htm(2) Comprehensive relative importance figures are initially computed after the publication of December indexes and are recalculated after final December indexes are available. Individual items and subtotals may not add exactly to totals because of rounding differences.(3) The indexes for December 2015 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.(4) Trade indexes measure changes in margins received by wholesalers and retailers.(5) Includes intermediate trade, transportation, and warehousing services.(6) Includes crude petroleum.(7) Excludes crude petroleum.

Total goods less foods and energy inputs to stage 4 intermediate demand

04/10

42.273

107.5

107.4

107.7

-0.8

0.3

-0.1

0.0

0.2

Total goods inputs to stage 3 intermediate demand

04/10

50.827

96.5

95.5

95.6

-8.9

0.1

-2.1

0.3

-0.3

Total services inputs to stage 3 intermediate demand

04/10

48.112

108.4

109.8

109.8

0.9

0.0

0.3

-0.3

0.0

Total construction inputs to stage 3 intermediate demand

04/10

1.062

109.8

110.0

110.0

1.3

0.0

-0.2

0.2

0.1

Total foods inputs to stage 3 intermediate demand

04/10

11.442

108.3

112.9

111.6

-11.8

-1.2

-3.2

0.9

-1.6

Total energy goods inputs to stage 3 intermediate demand

04/10

8.764

71.9

66.6

67.2

-21.6

0.9

-5.9

1.8

-1.0

Total goods less foods and energy inputs to stage 3 intermediate demand

04/10

30.621

102.2

101.0

101.4

-3.8

0.4

-0.6

-0.3

0.4

Total goods inputs to stage 2 intermediate demand

04/10

40.720

77.6

76.0

78.0

-9.5

2.6

-1.4

1.3

2.5

Total services inputs to stage 2 intermediate demand

04/10

57.421

108.3

110.5

110.4

1.9

-0.1

0.5

0.1

-0.2

Total construction inputs to stage 2 intermediate demand

04/10

1.859

109.8

110.0

110.0

1.3

0.0

-0.2

0.2

0.1

Total foods inputs to stage 2 intermediate demand

04/10

4.132

109.4

108.5

109.5

-7.8

0.9

-1.1

-1.3

-0.5

Total energy goods inputs to stage 2 intermediate demand

04/10

10.261

48.9

46.2

50.5

-20.8

9.3

-3.3

6.5

9.3

Total goods less foods and energy inputs to stage 2 intermediate demand

04/10

26.327

97.4

96.5

97.0

-4.6

0.5

-0.7

0.0

0.4

Total goods inputs to stage 1 intermediate demand

04/10

54.667

84.6

83.6

84.9

-7.5

1.6

-1.2

0.5

1.1

Total services inputs to stage 1 intermediate demand

04/10

45.321

111.5

113.1

113.2

-0.4

0.1

0.1

-0.6

0.3

Total construction inputs to stage 1 intermediate demand

04/10

0.010

109.8

110.0

110.0

1.3

0.0

-0.2

0.2

0.1

Total foods inputs to stage 1 intermediate demand

04/10

2.326

101.4

99.6

98.6

-7.9

-1.0

-0.5

-1.2

-1.8

Total energy goods inputs to stage 1 intermediate demand

04/10

10.760

77.4

72.8

74.3

-17.7

2.1

-4.0

0.7

1.0

Total goods less foods and energy inputs to stage 1 intermediate demand

04/10

41.581

84.5

84.5

85.8

-4.7

1.5

-0.4

0.4

1.4

Footnotes(1) Further information about the Final Demand-Intermediate Demand Aggregation system is available online at http://www.bls.gov/ppi/fdidaggregation.htm(2) Comprehensive relative importance figures are initially computed after the publication of December indexes and are recalculated after final December indexes are available. Individual items and subtotals may not add exactly to totals because of rounding differences.(3) The indexes for December 2015 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.

Footnotes(1) Further information about the Final Demand-Intermediate Demand Aggregation system is available online at http://www.bls.gov/ppi/fdidaggregation.htm(2) The indexes for December 2015 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.(3) Not seasonally adjusted.(4) Trade indexes measure changes in margins received by wholesalers and retailers.

"-" Data not available.
NOTE: The term "(partial)" denotes incomplete coverage of the index category.

Commercial and industrial machinery and equipment repair and maintenance(3)

55-1

03/09

117.0

118.2

117.7

0.8

-0.4

1.5

-0.4

-0.4

Aircraft repair and maintenance

55-4

04/09

114.0

115.9

115.9

3.3

0.0

-0.9

0.3

0.1

Construction for intermediate demand

11/09

110.7

110.9

111.0

1.4

0.1

-0.2

0.2

0.2

Maintenance and repair of non-residential buildings (partial)

80-2

12/10

111.9

112.1

112.2

1.4

0.1

-0.2

0.2

0.2

Footnotes(1) Further information about the Final Demand-Intermediate Demand Aggregation system is available online at http://www.bls.gov/ppi/fdidaggregation.htm(2) The indexes for December 2015 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.(3) Not seasonally adjusted.(4) Trade indexes measure changes in margins received by wholesalers and retailers.

"-" Data not available.
NOTE: The term "(partial)" denotes incomplete coverage of the index category.

Footnotes(1) Further information about the Final Demand-Intermediate Demand Aggregation system is available online at http://www.bls.gov/ppi/fdidaggregation.htm(2) The indexes for December 2015 have been recalculated to incorporate late reports and corrections by respondents. All indexes are subject to revision 4 months after original publication.(3) Not seasonally adjusted.

"-" Data not available.
NOTE: The term "(partial)" denotes incomplete coverage of the index category.

Footnotes(1) All seasonally adjusted indexes are subject to change up to 5 years after original publication due to the recalculation of seasonal factors each January. The indexes for December 2015 have been recalculated to incorporate late reports and corrections by respondents.(2) PPI defines Total finished as including only the personal consumption and private capital investment portions of final demand.